RBA should put brakes on rates: REIA

The Real Estate Institute of Australia (REIA) president David Airey has warned the RBA that any further rate rise next month will cripple the housing market.

“The slowdown in the housing market over the past month is a real concern for our economy,” Mr Airey said.

Since early April, we’ve seen the market change from buoyant to slow and depressed,” he said.

According to Mr Airey, the strength that was evident in the housing market in the first quarter of this year is now almost non-existent.

“Six rates rises in eight months is unnecessary and has overwhelmed the market while it was still in recovery,” Mr Airey said.

Latest figures from the Australian Bureau of Statistics show that the number of first home buyers, as a percentage of total owner occupied housing commitments, has decreased to 16.1 per cent in March 2010, compared to 18.1 per cent in February.

“This is the lowest for some five years, and compares to the long-run average of 20.1 per cent.”

"When the ABS figures were released earlier this month, I said that first home buyers were a dying breed.

“I think that the RBA need to look at a wider set of figures and statistics before they ramp up rates in the future, to avoid these extremes in market conditions and anxiety it causes borrowers,” he said.